Our response to the Inquiry builds on existing measures. In doing so, we are setting out an agenda for improving our financial system.
This agenda aims to:
- strengthen the resilience of the financial system;
- improve the efficiency of the superannuation system;
- stimulate innovation in the financial system;
- support consumers of financial products being treated fairly; and
- strengthen regulator capabilities and accountability.
We all have a vital stake in the operation of our financial system.
The financial system touches the life of every individual, family and business. We rely on the financial system for the multiplicity of transactions undertaken in any week. The financial system helps us manage our household budgets, holds our savings, provides the credit we need and, through insurance, helps us manage risks we face. Our largest lifetime undertakings — including purchasing a home, providing for our retirement or starting a business venture — are all supported by the financial system.
A competitive, innovative and efficient financial system supports the operation of the whole economy. In recent years, we have seen how important the resilience of our banks is during global shocks.
The financial system, like so many other parts of our lives, is being transformed by technological change, innovation and globalisation. If Australia fails to adapt to these developments to take the opportunities they present while managing evolving risks we will fall behind the rest of the world.
If consumers are overcharged or treated unfairly, the losses they incur adversely affect the whole community. And as the population ages, the cost of inefficiencies in our superannuation policy framework will escalate.
Our financial system program is made up of five distinct strategic priorities that deal with each of these challenges.
- The resilience measures aim to reduce the impact of potential future financial crises by ensuring we are better able to weather them and lessen their cost to taxpayers and the economy.
- The superannuation and retirement incomes measures aim to improve the efficiency and operation of the superannuation system and in doing so boost retirement incomes.
- The innovation measures will unlock new sources of finance for the wider economy and support competition.
- The consumer outcomes measures are designed to give consumers confidence to participate in the financial system and the confidence that they are being treated fairly.
- The regulatory system measures aim to make regulators more accountable for their performance, more capable and more effective.
These priorities are discussed below. Further detail is provided in the attachments.